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Should You Buy Silver?

A question I asked myself back in 2006 was, “Should I buy silver instead of putting more money into the stock market.” I’m happy to say that even to the laughs and cries of many of my close friends and relatives I decided to do just that. I decided to buy silver. I am still buying today, too and recommend to my friends and family to do the same. Some listen, some do not. Those that have listened to me have come back to say thanks. I decided to write this page so everyone wondering if buying silver is the right thing to do can have my perspective on it, if they want it.

Of course, the decision to buy silver was not a simple one for me. No one that I knew bought silver coins and put them in safe places. No one was even buying or investing in silver or gold certificates or stocks at that time, either. It was all about real estate and the stock market.

My peers were all talking about the next big thing in the stock market, or buying properties to flip or investing in houses being built. No one was telling me “yeah, you should buy silver right now.”

I would hear things like “Instead of buying silver, lets use the money for a down payment on a house with an adjustable rate that we can get cheap for a few years while we flip it for big bucks like they are doing on TV!”. Man just put your money in a mutual fund and ride the market up… Why put it in silver?”

While the advice was well meant, it just did not make sense to me.

My History of Deciding Should I Buy Silver

Growing up I lived with my grandparents. I remember my grand father used to let me hold his silver coins. They had weight and you just knew that they were valuable. Silver is like that. If you have held an ounce of silver in your hands already then you know what I am talking about. It just has value, intrinsic value that is obvious. It has been a form of currency and trade for thousands of years (alongside gold and other things of value of course) so it makes sense that we are a bit hard wired to know this has value.

Now let me be honest, I was not looking for a ‘get rich quick scheme.’

I was looking for a ‘don’t go broke if the shit hits the fan scheme’.

I was looking for a way to feed the family if the economy crumbles…

Long story short, I wanted to diversify, and precious metals looked like a good place to investigate and decide for myself should I buy silver, should I buy gold or should I buy both.

I will preface this by saying that at the time of 2005 and 2006, I had bad feelings about the economy and a general mistrust of the government and media. Hey what can I say, my grandparents said not to trust the government. Your parents and grand parents probably said the same thing too, right! That’s because they knew better and tried to warn us, but years of soft living and easy money has lulled us into a false sense of security. Anyway, I looked up investing in silver on wikipedia and saw that silver, and gold and other precious metals, were defined as a ‘store of value‘. Essentially, something that takes the value that it has today and keeps that value over time. More or less independently from the paper, fiat money we use today. This is paper money which is not backed up by anything of value anymore. This is the type of money that has it’s value reduced over time as things cost more and more and more.

Here is an example.

Today I can buy around 10 loaves of bread with an $20 bucks or 1 ounce of silver. In five years, I will still be able to buy around 10 loaves of bread with that same 1 ounce of silver. However, if inflation occurs then it is likely that my same $20 dollars will only purchase four or five loaves of bread.

Does anyone not think bread will hit $4.00+ per loaf within the next five years?

In five years time, buying ten loaves of bread is likely to cost me closer to $40 dollars. My dollars have lost their purchasing power!

However, I could pull out an ounce of silver that I purchased five years ago for $20 and still buy ten loaves of bread!

In five years time the silver you bought five years ago still has it’s same purchasing power today. But all of the $100 bills you have in the bank or in your safe will now purchase only half as much!

Buying Silver Today

At the time I first wrote this article, spot price for silver is just about $20 bucks. I would go ahead and get in now, because regardless of if it goes up or down some (which it will, and it can be very up and down!!) over the long haul it will maintain purchasing power. While the paper dollars lose their purchasing power over time. The scary part is that paper currency not backed by anything of real value can go hyper inflation virtually over night. This happened in the Weimar Republic in Germany in the 1920’s (the roaring 20’s over in the States).

It’s hard to believe, even to this day that something like that could happen. I mean there would be rioting in the streets big time. It is scary to even think about, but just now is middle America becoming re-awoken to the possibility of things like this. I’ve been bidding on silver auctions at penny bidding sites and trying to win ounces of silver in penny auctions.

Even the main stream media of Glenn beck and FOX news has talked about hyper inflation.
Glen Beck with pictures of Weimar Republic Million Mark Note

So Should You Buy Silver?

You are obviously thinking about buying silver, that is why you are on this page, right? Only you can answer that question for yourself and this page is in no means investment advice. Let me get that out of the way right up front, this is no way advice for investment! This is my story of me answering the question of should I buy silver or do something else with my money. Your situation is unique and only you know what that is.

If you have extra dollars sitting around in your bank looking for somewhere to go and you want a way to hedge against inflation then I like silver as your choice. Yes, you should buy real silver and really get it in your hands, as well. Keep it in safe places, whether that means a safety deposit box, in a safe in your basement, buried in your back yard or hidden away where only you know then it makes sense for everyone to have some silver. If you are looking to buy silver with a credit card, that you can’t pay off then I have to say it depends on you.

Here are some reasons you should buy silver

  • Low price point to get started
  • It’s liquid money, almost everyone will trade for a 1 oz silver coin and or give you cash for it anytime
  • It’s extremely low price considering it’s historic relationship to gold (no where near the 1/16 value historically it has had)
  • Inflation hedge

You can start buying silver online right now with a few ounces and go up from there. Get a sleeve of silver in and hold the coins in your hand and see how it feels. You can purchase silver online for as low as $1.89 above spot prices at the American Precious Metals Exchange. They have the most competitive prices anywhere and are reputable and you know you are getting the real thing! I like to get at least 20 ounces at a time to average down the shipping cost and it’s like an insurance policy for the worst case scenario.

I do not want to scare anyone, but if a Weirmar Republic situation happens in the USA like it did in Germany then those thousands or tens of thousands of dollars you have in the bank and in the 401k is going to have the purchasing power of almost nothing.

Silver or Gold? Which to Buy?
If you are relatively new to investing in metals then by all means start out with some silver! You can get a sleeve of 20, 1 oz silver coins from APMEX to start you off. Start with a sleeve and build from there. Historically, 16 ounces of silver had the same purchasing power of 1 ounce of gold. At the time of this article, silver is at $20 an ounce and Gold is at record highs of $1260. Today, you need around 63 ounces of silver to equal one ounce of gold, meaning that we are way, way, way below the price that silver should be if 16 ounces of silver equal 1 oz of gold. Assuming this historical trend is true, and gold is at $1260 then silver should be at $78.75 / oz.

Buying Silver for Security

I like the idea of knowing that if the worst case scenario does indeed happen and the US dollar becomes worthless then my family and I will still have things of value to trade with! I want you to have things to trade to me as well! The more people who diversify out of the dollar, the better things will be if the worst case scenario does happen. I was told growing up that an ounce of silver is enough to feed your family for a week. I hope and pray I never have to find out if that is true!

Do You Buy Silver Bars or Coins and Have it in Your Hands?

My father in-law asked me that exact question as he was intrigued with me talking about buying gold and silver. He asked me, “Do you buy a certificate for silver or do you actually have like coins in a safe?”. The answer is yes to actually having the coins and kept in safe places. Absolutely. Part of the allure of buying silver for me was to have it on hand in case I needed it. I did not really buy precious metals as an investment directly (although I did and do think the prices are going up on both gold and silver) but that I wanted to be able to have access to something I could use in really bad times. Even if you do not think it is going to get really bad (and I really hope it does not) it does not hurt you to have some precious metals on hand just in case. You’ve got a fire extinguisher right? You have home owners insurance, right? You have life insurance right and probably car insurance? Well this is the type of insurance I was looking for, one that I could buy to protect the value that my dollars could purchase at that particular point in history, help protect my family in case of dire economic meltdown, and hedge myself against the spectre of hyper-inflation. You can buy silver online from reputable dealers and have it in your hands within days of purchase and even faster if you upgrade your shipping.

Look, at least for a portion of your precious metals investments you need to have the real thing in your hand. It is easy to buy silver online, one of the most reputable precious metals dealers, The American Precious Metals Exchange (APMEX) has online ordering that is fast, easy and you can do it online or over the phone. I have bought from them in the past multiple times and it has always been fast, easy and the metals have been beautiful. You can buy all sorts of different types of silver at APMEX.

You can also check out JMBullion for safe, secure arrival of your precious metals such as your silver bars.